13.2 – Cancelled Recurring Transaction

DESCRIPTION

Why did I receive a chargeback with reason code 13.2?

You received this chargeback because the cardholder claims you processed a recurring transaction after they requested a cancellation or you processed a recurring transaction on an account that had been closed.

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CLASSIFICATION

How does Visa classify this dispute?

Visa reason codes are grouped into four categories: fraud, authorisation errors, processing errors, and consumer disputes.

Reason codes that start with 13 are for consumer disputes.

ISSUER TIME LIMIT

How long can the issuer wait to file a chargeback with reason code 13.2?

The maximum amount of time that can pass between the transaction processing date and the dispute processing date is 120 calendar days.

VALIDITY

What would make a 13.2 chargeback invalid?

This reason code can be used to dispute a merchant-initiated transaction that was part of a scheduled, ongoing payment plan.

So if any of the following conditions are true, the issuer shouldn’t use this reason code:

• The transaction was unscheduled.
• The transaction was initiated by the cardholder.
• The transaction was part of an installment payment plan (unless the merchant is in Europe).

There are a few additional situations where this reason code is invalid:

• The transaction was a mobile push payment.
• The transaction used straight-through processing.
• The transaction was unauthorised and a fraud reason code should be used instead.
• The cardholder cancelled the payment plan after the transaction had been processed.

SUPPORTING DOCUMENTS

Can I fight a chargeback with reason code 13.2?

Yes. You can and should fight a 13.2 chargeback if you have the required supporting documents.

• Evidence that the chargeback is invalid. (Note: Your acquirer’s technology should catch these errors and automatically respond on your behalf. If your acquirer doesn’t automatically respond and you receive a chargeback notice, you can challenge the chargeback yourself.)
• Evidence that you refunded one of the transactions before the chargeback was filed.
• Evidence that the cardholder no longer disputes the transaction.
• Evidence that the cardholder requested cancellation on a date that differs from what was stated in the dispute.
• Evidence that the acquirer or merchant were not notified of the account’s closure.
• Evidence that the cardholder used the services after the cancellation date or date services were revoked.

WORKFLOW

What process do I use to respond to a chargeback with reason code 13.2?

Visa reason code 13.2 is managed with the collaboration workflow.

You can challenge a 13.2 chargeback with a dispute response. Collect the required documents we’ve outlined above. Write a rebuttal letter to explain your case. And submit your response package to your acquirer or processor for review.

ACQUIRER TIME LIMIT

How quickly do I need to file a chargeback response?

Your acquirer must submit your chargeback response within 30 calendar days of the chargeback filing date.

NOTE: This is the acquirer time limit. Because acquirers have administrative tasks to complete before the chargeback notice is sent and after the chargeback response is received, your time limit will be much less — probably in the 3-20 day range. Check your chargeback notice for the expiration date.

ADVANCING THE CASE

Can the issuer file pre-arbitration after a 13.2 dispute response?

Yes. Issuers can file pre-arbitration for any collaboration dispute — and 13.2 is no exception.

Issuers use the pre-arbitration process to address information or evidence provided in your dispute response. Pre-arbitration attempts can be made for any of the following reasons.

• The issuer can provide new documents or information about the original dispute.
• The issuer changes the reason code because of information or documents provided in the dispute response. (The issuer can only change the reason code if the original chargeback was valid.)
• If your dispute response included a claim that the cardholder no longer wants to dispute the transaction, the issuer must prove that the cardholder does, in fact, want to continue the dispute.
• If you provided the required supporting documents and disputed the cardholder’s claim, the issuer must review the evidence with the cardholder and provide an explanation of why the cardholder continues to dispute the transaction.
• If you refunded the cardholder after the chargeback was filed, but the issuer suffered a financial loss because of the exchange rate, the issuer can advance the case to pre-arbitration.

There are additional stipulations that are specific to disputes with reason code 13.2.

• If there is a discrepancy between you and the cardholder on the cancellation date, the issuer must provide evidence to support the cardholder’s claim.
• If you claim the cardholder used the services after the cancellation date, the cardholder must provide evidence that the usage was included with a previous transaction that happened prior to the dispute processing date.

PREVENT

How can I avoid 13.2 chargebacks in the future?

Here is how to prevent these types of disputes in the future.

• Clearly and concisely communicate your cancellation policy and make it easy for customers to find the information.
• Remind customers of upcoming charges, especially if a significant amount of time passes between each recurring billing cycle.
• Make sure qualified cancellation and non-renewal requests are fulfilled promptly and accurately.
• Send a notification after you’ve cancelled the recurring payment. Let the cardholder know the exact date when access will be terminated.
• If new fees are incurred after the cancellation, communicate with the cardholder about how those charges should be handled.
• Use Visa Account Updater to replace outdated cardholder information with new data before you process the next recurring transaction.

Visit our detailed guide for a complete list of chargeback prevention tips.